S&P 500 closes higher; Rising Treasury yields boost banks By Reuters


©Reuters. A gesture operator while working at the New York Stock Exchange, USA. March 17, 2022. REUTERS/Brendan McDermid


By Caroline Valetkevitch

NEW YORK, March 25 (Reuters) – The closed slightly higher on Friday, as financial stocks rose after the benchmark Treasury yield jumped to its highest level in nearly three years, while technology and other large growth companies went down.

* The financial sector of the S&P 500 was the biggest booster to the index, while the technology sector was the biggest detractor.

* For the week, the S&P 500 and the posted gains and the Dow was almost flat.

* Investors are gauging how aggressive the Federal Reserve will be in its tightening of monetary policy, after Fed Chairman Jerome Powell said this week that the central bank needed to move “quickly” to combat high inflation and raised the possibility of a 50 basis point rate hike in May.

* The yield on the 10-year Treasury note rose above 2.5%.

* “The stock market is pricing in a higher rate environment,” said Keith Buchanan, portfolio manager at Globalt Investments in Atlanta.

* This makes bank stocks outperform while “adds more pressure to riskier elements of the market” such as growth stocks, he added.

* Rising interest rates tend to be negative for technology and growth stocks, whose valuations are based more on future cash flows.

* Based on preliminary data, the S&P 500 gained 23.78 points, or 0.53%, to 4,543.94, while the Nasdaq lost 21.86 points, or 0.15%, to 14,173.22. The Industrial Average rose 153.40 points, or 0.44%, to 34,861.34 units.

(Edited in Spanish by Manuel Farías)

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